Investors Talk Next Steps for the Digital Experience and Martech Spaces

As we close out another year of marketing technology — only 7,000 solutions and counting — we caught up with investors to gauge what’s hot in the martech and digital experience software space. Investors said martech and digital experience software providers will need to build platforms, not products, and help marketers go beyond simple data-capture with actionable intelligence.

Competing Cloud SaaS Services

Why is it important to understand this market? Marketers are grappling with an overwhelming number of solutions, as Scott Brinker reported earlier this year in his Chief Marketing Technologist blog, the average enterprise today now uses more than 1,000 cloud services across every department. And, he added, “I’m pretty sure marketing has the largest vendor landscape of all of them.”

There are a lot of products and services with which to contend. The good news? Most marketers can hack it. Gartner noted, in its Gartner 2018 Marketing Technology Survey (fee required), 70 percent of marketers view their martech stack as effective. It’s a lot to manage, though, as 74 percent of marketers have martech management responsibilities, Gartner researchers said.

And they do their research, they use five different sources to inform themselves on new martech purchases (vendors; experiences; other decision-makers; events; and conference and analyst reports).

Tools That Speak to Brands

Liu also noted that martech vendors need to provide tools tailored to the brands themselves. “More and more,” she said, “brands are demanding a higher level of accountability from their agency partners, if not taking back control altogether. They look to software to help them make the leap.”

Build a Platform, Not a Product

Arsham Memarzadeh, vice president at OpenView Venture Partners, which recently invested in Highspot, an AI powered sales enablement tool, said there are seemingly a dozen new sales and marketing startups popping up every week. To stand out, he said, martech tools need to get to a point that turning off the product is not an option once implemented. “Most products in the space,” he said, “are solving point-in-time needs.”

Martech solutions must also have some competitive defensibility so they don’t become commoditized. These solutions must evolve into platforms, and not just another product that gets lost in the mix. “It’s a crowded space, you don’t want to add yet another solution without consolidating the stack a bit,” Memarzadeh said.

Period of Reinvention in Commerce, Marketing Solutions

Underscore VC, which has invested in companies such as Mautic, Zaius, Salsify and Moltin, is spending a lot of time thinking about what it calls a “Me-Commerce” Thesis, according to Richard F. Dulude, co-founder and partner.

“The path to purchase has become personalized,” he said, “and we believe this trend will become even more intimately tied to you. We call this next evolution of commerce ‘Me-Commerce.’”

This is not about looking at 2D images, or spinning 3D models, but rather, having the item on you, or in the space in front of you, according to Dulude. “We believe the logical extension of personalization of commerce is tailor-fitting the buying experience 'around you,' for example, 'you are the mannequin' vs. 'see it on the mannequin.'"

He went on to share that purchasing is deeply personal. “We want to ‘try’ items in our own spaces — our homes, offices, or even on ourselves,” he said. “As such, we believe that it is slowly inevitable that commerce and marketing will become spatially oriented and deeply personal. Simply put, they way we buy and discover will no longer be constrained to a screen or a static experience for every buyer."

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